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In a recent tweet, Ripple’s Chief Technology Officer, David Schwartz, responded to assertions that XRP holders should be regarded as investors in Ripple.
Schwartz countered the hypothetical claim by drawing parallels with the e-commerce giant Amazon.
Notably, the Ripple CTO initiated the discussion while expressing dissent regarding the operation of a billion-dollar company with a board of directors not answerable to investors. Schwartz was speaking on the recent OpenAI incident involving the sack of Sam Altman.
“I was just thinking, maybe a board that’s not accountable to investors and leaving the CEO and employees out of the upside isn’t such a great way to run a multibillion-dollar tech company,” the Ripple CTO said.
I was just thinking, maybe a board that's not accountable to investors and leaving the CEO and employees out of the upside isn't such a great way to run a multibillion dollar tech company.
— David "JoelKatz" Schwartz (@JoelKatz) November 21, 2023
An XRP enthusiast, “Blockchain Maverick,” joined the conversation, advocating for XRP investors in response to Schwartz’s perspective.
In particular, Blockchain Maverick boldly asserted that XRP holders qualify as investors in Ripple. This claim is rooted in the view that the lion’s share of the funds driving Ripple’s business operations is sourced from purchasers of the XRP token.
Ripple CTO Disagrees
In dispelling the view that XRP holders deserve recognition as Ripple investors, Schwartz drew a comparison with Amazon’s business model.
He highlighted that the majority of the funds sustaining Amazon’s business operations are derived from individuals who use the platform to purchase items from third-party sellers. “Does that make them investors in Amazon,” Ripple’s CTO asked.
Most of the cash that fuels Amazon's biz operations comes from people who use their site to buy things from other people. Does that make them investors in Amazon?
— David "JoelKatz" Schwartz (@JoelKatz) November 21, 2023
However, some crypto enthusiasts failed to welcome Schwartz’s analogy. “Not quite the same,” an XRP supporter noted in reply, arguing that Amazon did not create the goods it sells. Ripple’s CTO countered this, noting that it would not make a difference if Amazon created all or none of the goods on its platform.
Meanwhile, Blockchain Maverick highlighted that the Ripple team had opted for the release of XRP as a substitute for an IPO. His point was that Ripple aimed to benefit from XRP like they would have benefited from an IPO.
Schwartz clarified, noting from a personal standpoint, that his intention and conviction were consistently aligned with the idea that Ripple would generate revenue through an IPO. Moreover, he claimed this perspective influenced his decision to opt for Ripple stock rather than XRP as compensation.
Furthermore, he noted that the deviation from the IPO trajectory, at least from his standpoint, was wholly unexpected.
The trajectory that took Ripple away from an IPO was completely unexpected, at least to me. Had Ripple been formed almost anywhere else in the world, it'd likely be a public company today. 2/2
— David "JoelKatz" Schwartz (@JoelKatz) November 21, 2023